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▇▇▇▇▇ INDUSTRIES, INC.
Issuer,
THE SUBSIDIARY GUARANTORS NAMED HEREIN
Subsidiary Guarantors
and
UNITED STATES TRUST COMPANY OF NEW YORK
Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of April 21, 1998
$110,000,000
10% Senior Notes Due 2007
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FIRST SUPPLEMENTAL INDENTURE, dated as of April 21, 1998, by and between
▇▇▇▇▇ Industries, Inc., a California corporation (the "Company"), the Subsidiary
Guarantors (as defined in the Indenture), ▇▇▇▇▇▇ Products Company, Inc., a New
Jersey corporation ("▇▇▇▇▇▇") and United States Trust Company of New York, a New
York Banking corporation, as Trustee (the "Trustee")
RECITALS OF THE COMPANY
WHEREAS, the Company and the existing Subsidiary Guarantors have heretofore
executed and delivered to the Trustee that certain Indenture, dated as of August
20, 1997 (the "Original Indenture", and as amended hereby, the "Indenture"), by
and among the Company, the existing Subsidiary Guarantors and the Trustee
pursuant to which $110,000,000 of the 10% Senior Notes due 2007 of the Company
were issued (capitalized terms used herein and not defined herein have the
meanings given to such terms in the Original Indenture);
WHEREAS, Section 902 of the Indenture provides that the Company, the
existing Subsidiary Guarantors and the Trustee may, from time to time, with the
consent of the Holders of not less than a majority in aggregate Outstanding
principal amount of the Notes, enter into one or more supplemental indentures to
provide for, among other things, the amendments to the Indenture set forth below
(the "Amendments");
WHEREAS, the Company has solicited the consent of the Holders of the Notes
to the Amendments pursuant to that certain Consent Solicitation Statement dated
March 30, 1998;
WHEREAS, Holders of at least a majority in aggregate principal amount of
the Outstanding Notes have consented to the Amendments;
WHEREAS, on March 5, 1998, the Company entered into a Stock Purchase
Agreement among the Company, ▇▇▇▇▇▇ Products Company, Inc. ("▇▇▇▇▇▇") and
Sovereign Specialty Chemicals, Inc. pursuant to which the Company will,
simultaneously with the execution of this First Supplemental Indenture, acquire
all of the outstanding capital stock of ▇▇▇▇▇▇;
WHEREAS, pursuant to Section 1310 of the Indenture the Company must provide
to the Trustee, on the date that any Person becomes a Restricted Subsidiary, a
supplemental indenture in accordance with the terms of Section 1310 of the
Indenture;
WHEREAS, ▇▇▇▇▇▇ desires to guarantee the obligations of the Company under
the Indenture in accordance with the terms thereof;
WHEREAS, the Company, ▇▇▇▇▇▇ and the existing Subsidiary Guarantors have
been duly authorized by each of their respective Board of Directors to enter
into, execute and deliver this First Supplemental Indenture;
WHEREAS, the Company and the existing Subsidiary Guarantors have complied
with all conditions contained in the Indenture with respect to the Amendments;
and
NOW THEREFORE, for and in consideration of the premises and covenants and
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Trustee agree as follows:
ARTICLE ONE
AMENDMENTS
The following sections of the Indenture are hereby modified as follows:
SECTION 1. Section 101 of the Indenture is hereby amended by adding the
following definitions:
"Additional New Notes" means up to $20.0 million in aggregate principal
amount of New Notes having identical terms to the New Notes that, subject to
compliance with Article 10 of the New Indenture, may be issued after the New
Closing Date pursuant to the New Indenture.
"▇▇▇▇▇▇ Acquisition" means the acquisition by the Company of all of the
outstanding capital stock of ▇▇▇▇▇▇ Products Company, Inc. pursuant to a Stock
Purchase Agreement dated March 5, 1998 among the Company, ▇▇▇▇▇▇ and Sovereign
Specialty Chemicals, Inc.
"New Closing Date" means the date on which the New Notes are originally
issued under the New Indenture.
"New Indenture" means the indenture entered into on the New Closing Date
pursuant to which the New Notes are issued, as it may be supplemented or amended
from time to time.
"New Notes" means Floating Interest Rate Senior Notes due August 15, 2007
to be issued in connection with the ▇▇▇▇▇▇ Acquisition and shall include (i) any
notes having substantially identical terms issued in exchange for such New Notes
or any Additional New Notes pursuant to a registration rights agreement and (ii)
any Additional New Notes that may be issued pursuant to the New Indenture.
"New Notes Guarantee" means any guarantee of the New Notes issued by a
Restricted Subsidiary of the Company pursuant to the New Indenture.
"Recapitalization" means the August 20, 1997 acquisition by ▇.▇. ▇▇▇▇▇▇
Equity Investors I., L.P. of a controlling interest in the Company through a
recapitalization of the outstanding securities of the Company.
"Series C Preferred Stock" means the Convertible Preferred Stock of the
Company issued on the New Closing Date.
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SECTION 2. Restated Definition of Certain Defined Terms.
1. Clause (j) of the definition of Permitted Investments contained in
Section 101 is hereby deleted in its entirety and replaced with the following
language:
(j) other Investments in any Person, a majority of the equity ownership
and Voting Stock of which is owned, directly or indirectly, by the Company
and/or one or more of the Subsidiaries of the Company, that do not exceed
$7.5 million in the aggregate at any time outstanding.
2. The definition of Series A Preferred Stock contained in Section 101 is
hereby deleted in its entirety and replaced with the following language:
"Series A Preferred Stock" means, collectively, the Series A Cumulative
Redeemable Preferred Stock of the Company, no par value and the Series B
Cumulative Redeemable Preferred Stock of the Company, no par value, in each
case issued on the Closing Date.
SECTION 3. Section 1010 of the Indenture is hereby amended as follows:
1. Clause (i) of the definition of Permitted Indebtedness contained in
Section 1010 is hereby amended by deleting the figure $15 million appearing
therein and substituting therefor the figure $25.0 million.
2. Clause (iv) of the definition of Permitted Indebtedness contained in
Section 1010 is hereby deleted in its entirety and replaced with the following
language:
(iv) Indebtedness represented by (i) the Notes (other than the Additional
Notes), (ii) the Note Guarantees (including any Note Guarantees issued
pursuant to Section 1021 of this Indenture), (iii) the New Notes (other
than any Additional New Notes) and (iv) the New Notes Guarantees (including
any New Notes Guarantees issued pursuant to Section 1021 of the New
Indenture);
3. Clause (vii) of the definition of Permitted Indebtedness contained in
Section 1010 is hereby amended by deleting the figure $7,500,000 appearing
therein and substituting therefor the figure $10.0 million.
4. Clause (viii) of Section 1010 is hereby amended by deleting the figure
$10 million appearing therein and substituting therefor the figure $15.0
million.
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SECTION 4. Section 1011 of the Indenture is hereby amended by adding the
following language to the beginning of the paragraph beginning with
"Notwithstanding the foregoing, the Company and its Restricted Subsidiaries may
take the following actions ..."
For purposes of this "Limitation on Restricted Payments" covenant, the
accrual of dividends on the Series C Preferred Stock shall not be
treated as a Restricted Payment.
SECTION 5. Section 1013 of the Indenture is hereby amended by deleting clause
(F) thereof in its entirety and replacing it with the following language:
(F) the payment of all fees and expenses related to the
Recapitalization, the offering of the New Notes and the ▇▇▇▇▇▇
Acquisition; and
SECTION 6. Section 1014 of the Indenture is hereby amended as follows:
1. Clause (ii) of the definition of Permitted Liens contained in Section
1014 is hereby deleted in its entirety and replaced with the following language:
(ii) Liens on property or assets of the Company or any Restricted
Subsidiary securing Indebtedness under the Bank Credit Agreement or
one or more other credit facilities in a principal amount not to
exceed the aggregate principal amount of the outstanding Indebtedness
permitted by clauses (i) and (viii) of the definition of "Permitted
Indebtedness;
2. Clause (iv) of the definition of Permitted Liens contained in Section 1014
is hereby deleted in its entirety and replaced with the following language:
(iv) Liens securing (a) the Notes or any Note Guarantee or (b) any New
Notes or any New Notes Guarantees, provided that both the Notes or any
related Note Guarantee and the New Notes or any related New Notes
Guarantee are secured equally and ratably with the obligation or
liability secured by such Lien;
SECTION 7. Clause (c) of Section 1016 of the Indenture is hereby deleted in its
entirety and replaced with the following language:
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(c) When the aggregate amount of Excess Proceeds exceeds $5 million,
the Company shall, within 30 days thereafter, make an offer (an
"Excess Proceeds Offer") to purchase from all holders of Notes and New
Notes, PRO RATA in proportion to the respective principal amounts
outstanding of the Notes and New Notes, the maximum principal amount
(expressed as a multiple of $1,000) of Notes and New Notes that may be
purchased out of the Excess Proceeds, at a purchase price in cash
equal to 100% of the principal amount thereof, plus accrued interest,
if any, and Liquidated Damages, if any, to the date such offer to
purchase is consummated. To the extent that the aggregate principal
amount of Notes and New Notes tendered pursuant to such offer to
purchase is less than the Excess Proceeds, the Company or its
Restricted Subsidiaries may use such deficiency for general corporate
purposes. If the aggregate principal amount of Notes and New Notes
validly tendered and not withdrawn by holders thereof exceeds the
Excess Proceeds, the Notes and New Notes to be purchased shall be
selected on a PRO RATA basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset to zero.
ARTICLE TWO
ADDITIONAL NOTE GUARANTEE
SECTION 1. Simultaneously with the execution of this First Supplemental
Indenture, pursuant to Section 1310 of the Indenture ▇▇▇▇▇▇ shall issue a Note
Guarantee in the form attached hereto as Exhibit 1, and thereafter, ▇▇▇▇▇▇ shall
be deemed to be a "Subsidiary Guarantor" under and as defined in the Indenture.
ARTICLE THREE
MISCELLANEOUS
SECTION 1. Except as expressly supplemented by this First Supplemental
Indenture, the Indenture and the Notes issued thereunder are in all respects
ratified and confirmed and all of the rights, remedies, terms, conditions,
covenants and agreements of the Indenture and Notes issued thereunder shall
remain in full force and effect.
SECTION 2. This First Supplemental Indenture is executed as and shall
constitute an indenture supplemental to the Indenture and shall be construed in
connection with and as part of the Indenture. This First Supplemental Indenture
shall be governed by and construed in accordance with the laws of the
jurisdiction that governs the Indenture and its construction.
SECTION 3. This First Supplemental Indenture may be executed in any number of
counterparts, each of which shall be deemed to be an original for all purposes;
but such counterparts shall together be deemed to constitute but one and the
same instrument.
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SECTION 4. Any and all notices, requests, certificates and other instrument
executed and delivered after the execution and delivery of this First
Supplemental Indenture may refer to the Indenture without making specific
reference to this First Supplemental Indenture, but nevertheless all such
references shall include this First Supplemental Indenture unless the context
otherwise requires.
SECTION 5. This First Supplemental Indenture shall be deemed to have become
effective upon the date first above written.
SECTION 6. In the event of a conflict between the terms of this First
Supplemental Indenture and the Indenture, this First Supplemental Indenture
shall control.
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IN WITNESS WHEREOF, the parties have caused this First Supplemental
Indenture to be duly executed, and their respective corporate seals, if any, to
be hereunto affixed and attested, all as of the day and year first above
written.
▇▇▇▇▇ INDUSTRIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary Title: Assistant Secretary
UNITED STATES TRUST COMPANY
OF NEW YORK, as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
▇▇▇▇▇ FLOORING PRODUCTS, INC.
▇▇▇▇▇ CUSTOM PROCESSING, INC.
▇▇▇▇▇ RUBBER COMPANY, INC.
Each an existing Subsidiary Guarantor
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President Title: Assistant Secretary
▇▇▇▇▇▇ PRODUCTS COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ Attest: /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President Title: Assistant Secretary
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